When Google says the T-Mobile G1 will never get Android 2.2 Froyo because there's not enough space for the OS to fit in the flash space, the dev community thankfully doesn't listen. The folks at the xda developers have gotten a "very Alpha" build of 2.2 ported to both the T-Mobile G1 and myTouch 3G and it's sort of usable. Calls, 3G, LEDs, and the notification bar are in working order and it's noticeably speedier. Things that are currently broken: Wi-Fi, camera, gps, and external audio. And don't even think about installing Flash unless you like crashy browsers. If you're an experimenter of these sorts, you can download the alpha build of Android 2.2 froyo here.

Well, that answers that. At the Android Fireside chat at Google IO, the Android team says that…
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But don't think it's all frozen yogurt and rainbows from here, the limitations of the G1 hardware are real and even the most polished and stable build of this port won't have every feature of Froyo. The truth is, the G1 simply doesn't have enough storage space to fit the Froyo OS image without stripping features. Google is choosing to not port it at all, the devs will try to port as much as they can. [xda developers]